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Monday, November 1, 2010

Crude Oil Rises a Second Day on Chinese Manufacturing, U.S. Stimulus Speculation

Crude oil rose for a second day to trade near a two week high on speculation the Federal Reserve will take steps to stimulate the U.S. economy and on accelerating growth in China, the world’s largest energy consumer. Crude climbed above $83 a barrel before a Fed meeting where policy makers may announce a plan to buy at least $500 billion of long term securities, according to economists surveyed by Bloomberg News. Manufacturing in China and the U.S. increased in October, data yesterday showed. Consuming countries are happy with oil between $70 and $90 a barrel, said Ali al-Naimi, Saudi Arabia’s oil minister.

“Market participants want to see the result of the Fed meeting,” said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge in Tokyo. “For the rest of the year, the market should be sustained around this level. Like the Saudi minister said, that’s a pretty happy price for everyone.” Crude for December delivery rose as much as 50 cents, or 0.6 percent, to $83.45 a barrel in electronic trading on the New York Mercantile Exchange. It was at $83.37 at 12:05 p.m. Singapore time. Yesterday, the contract rallied $1.52, or 1.9 percent, to $82.95, the highest settlement since Oct. 18. Futures have gained 5.1 percent in 2010.

The Fed, meeting in Washington today and tomorrow, is expected to restart a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed by Bloomberg News......Read the entire article.